Chesapeake acquires Vine Energy for $2.2bn

US shale producer Chesapeake Energy has acquired rival Vine Energy for about $2.2bn, it said August 11. Vine holds acreage in the Haynesville basin in Louisiana, one of the most lucrative of the Lower 48 shale basins.

Pending the close of the transaction, expected in the fourth quarter, Chesapeake said it plans to operate around a dozen rigs this year, with most of them focused on natural gas.

As such, the company raised its preliminary output guidance from a high end of 420mn barrels of oil equivalent (boe)/day to 435mn boe/d, mostly gas.

“By consolidating the Haynesville, Chesapeake has the scale and operating expertise to quickly become the dominant supplier of responsibly sourced gas to premium markets in the Gulf Coast and abroad,” Chesapeake CEO Mike Wichterich said.

Vine first entered the Haynesville shale in 2014 after acquiring acreage from Shell and holds roughly 125,000 surface acres in its current portfolio. The company in March launched its initial public offering, releasing 18.75mn shares at $17.50 each.

Chesapeake itself exited bankruptcy in January, and announced the abrupt departure of CEO Doug Lawler on April 29 after nearly a decade at the top.

Chesapeake was founded by Aubrey McLendon and Tom Ward in the 1980s, leading pioneering efforts in the US shale boom. McLendon stepped down as CEO in 2013 and the company he helped found later sued him on charges of misappropriating funds.

McLendon died in a single-vehicle crash in 2016. At its peak, Chesapeake was the second largest US gas producer behind ExxonMobil, but it overextended itself, racking up $13bn in debt by the time Lawler took over as CEO.